37534 Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices

interested parties may submit written

comments in response to these

preliminary results. Case briefs must be

submitted within 30 days after the date

of publication of this notice, and

rebuttal briefs, limited to arguments

raised in case briefs, must be submitted

no later than five days after the time

limit for filing case briefs. Parties who

submit argument in this proceeding are

requested to submit with the argument:

(1) A statement of the issue, and (2) a

brief summary of the argument. Case

and rebuttal briefs must be served on

interested parties in accordance with 19

CFR 351.303(f). Also, pursuant to 19

CFR 351.310, within 30 days of the date

of publication of this notice, interested

parties may request a public hearing on

arguments to be raised in the case and

rebuttal briefs. Unless the Secretary

specifies otherwise, the hearing, if

requested, will be held two days after

the date for submission of rebuttal

briefs, that is, thirty-seven days after the

date of publication of these preliminary

results.

Representatives of parties to the

proceeding may request disclosure of

proprietary information under

administrative protective order no later

than 10 days after the representative’s

client or employer becomes a party to

the proceeding, but in no event later

than the date case briefs, under 19 CFR

351.309(c)(ii), are due. The Department

will publish the final results of this

administrative review, including the

results of its analysis of issues raised in

any case or rebuttal brief or at a hearing.

This administrative review is issued

and published in accordance with

section 751(a)(1) and 777(i)(1) of the Act

(19 U.S.C. 1675(a)(1) and 19 U.S.C.

1677f(i)(1)).

Dated: July 6, 1998.

Richard W. Moreland,

Acting Deputy Assistant Secretary for Import

Administration.

[FR Doc. 98–18599 Filed 7–10–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–533–063]

Certain Iron-Metal Castings from India:

Preliminary Results of Countervailing

Duty Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of

Countervailing Duty Administrative

Review.

SUMMARY: The Department of Commerce

is conducting an administrative review

of the countervailing duty order on

certain iron-metal castings from India.

The period covered by this

administrative review is January 1, 1996

through December 31, 1996. For

information on the net subsidy for each

reviewed company, as well as for all

non-reviewed companies, please see the

Preliminary Results of Review section of

this notice. If the final results remain

the same as these preliminary results of

administrative review, we will instruct

the U.S. Customs Service to assess

countervailing duties as detailed in the

Preliminary Results of Review section of

this notice. Interested parties are invited

to comment on these preliminary

results. (See Public Comment section of

this notice.)

EFFECTIVE DATE: July 13, 1998.

FOR FURTHER INFORMATION CONTACT:

Kristen Johnson or Christopher Cassel,

Office of CVD/AD Enforcement VI,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington,

D.C. 20230; telephone: (202) 482–2786.

SUPPLEMENTARY INFORMATION:

Background

On October 16, 1980, the Department

of Commerce (‘‘the Department’’)

published in the Federal Register (45

FR 50739) the countervailing duty order

on certain iron-metal castings from

India. On October 2, 1997, the

Department published a notice of

‘‘Opportunity to Request Administrative

Review’’ (62 FR 51628) of this

countervailing duty order. We received

timely requests for review, and we

initiated a review covering the period

January 1, 1996 through December 31,

1996, on November 26, 1997 (62 FR

63069).

In accordance with 19 C.F.R.

351.213(b), this review covers only

those producers or exporters of the

subject merchandise for which a review

was specifically requested. The

producers/exporters of the subject

merchandise for which the review was

requested are:

Calcutta Ferrous Ltd.,

Carnation Industries Ltd.,

Commex Corporation,

Crescent Foundry Co. Pvt. Ltd.,

Delta Enterprises,

Dinesh Brothers (P) Ltd.,

Kajaria Iron Castings Pvt. Ltd.,

Kejriwal Iron & Steel Works Pvt. Ltd.,

Metflow Corporation,

Nandikeshwari Iron Foundry Pvt. Ltd.,

Orissa Metal Industries,

Overseas Iron Foundry,

R.B. Agarwalla & Company,

R.B. Agarwalla & Co. Pvt. Ltd.,

RSI Limited,

Seramapore Industries Pvt. Ltd.,

Shree Rama Enterprise,

Shree Uma Foundries,

Siko Exports,

SSL Exports,

Super Iron Foundry,

Uma Iron & Steel, and

Victory Castings Ltd.

Delta Enterprises, Metflow Corporation,

Orissa Metal Industries, R.B. Agarwalla

& Co. Pvt. Ltd., Shree Uma Foundries,

Siko Exports, and SSL Exports did not

export the subject merchandise to the

United States during the period of

review (‘‘POR’’). Therefore, these

companies have not been assigned an

individual company rate for this

administrative review. This review

covers 19 programs.

On November 14, 1997, the

Department issued a questionnaire to

the Government of India (‘‘GOI’’) and

producers/exporters of the subject

merchandise. The Department received

questionnaire responses from the GOI

and the producers/exporters of the

subject merchandise on January 13,

1998. The Department issued

supplemental questionnaires to the GOI

and certain producers/exporters of the

subject merchandise on March 16 and

25, 1998, April 30, 1998, and May 14,

1998. The supplemental questionnaire

responses were received on April 9,

1998, and May 11, 15, and 21, 1998.

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions of the Tariff Act of 1930,

as amended by the Uruguay Round

Agreements Act (‘‘URAA’’) effective

January 1, 1995 (‘‘the Act’’). The

Department is conducting this

administrative review in accordance

with section 751(a) of the Act. All

citations to the Department’s regulations

reference 19 C.F.R. Part 351, 62 FR

27296 (May 19, 1997), unless otherwise

indicated.

Scope of the Review

Imports covered by this

administrative review are shipments of

Indian manhole covers and frames,

clean-out covers and frames, and catch

basin grates and frames. These articles

are commonly called municipal or

public works castings and are used for

access or drainage for public utility,

water, and sanitary systems. During the

review period, such merchandise was

classifiable under the Harmonized Tariff

Schedule (‘‘HTS’’) item numbers

7325.10.0010 and 7325.10.0050. The

HTS item numbers are provided for
Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices 37535

convenience and Customs purposes.

The written description remains

dispositive.

Verification

As provided in section 782(i) of the

Act, we verified information submitted

by the Government of India and certain

producers/exporters of the subject

merchandise. We followed standard

verification procedures, including

meeting with government and company

officials and conducting an examination

of all relevant accounting and financial

records and other original source

documents. Our verification results are

outlined in the public versions of the

verification reports, which are on file in

the Central Records Unit (Room B–099

of the Main Commerce Building).

Analysis of Programs

I. Programs Conferring Subsidies

A. Pre-Shipment Export Financing

The Reserve Bank of India (‘‘RBI’’),

through commercial banks, provides

short-term pre-shipment financing, or

‘‘packing credits,’’ to exporters. Upon

presentation of a confirmed export order

or letter of credit, companies may

receive pre-shipment loans for working

capital purposes, i.e., for the purchase of

raw materials and for packing,

warehousing, and transporting of export

merchandise. Exporters may also

establish pre-shipment credit lines upon

which they may draw as needed. Credit

line limits are established by

commercial banks, based upon a

company’s creditworthiness and past

export performance. Companies that

have pre-shipment credit lines typically

pay interest on a quarterly basis on the

outstanding balance of the account at

the end of each period. In general,

packing credits are granted for a period

of up to 180 days.

Commercial banks extending export

credit to Indian companies must, by

law, charge interest on this credit at

rates determined by the RBI. During the

POR, the rate of interest charged on preshipment export loans was 13.0 percent.

For packing credits not repaid within

180 days, banks charged interest at 15.0

percent for the number of days the loan

was overdue. Exporters would lose the

concessional interest rate if the loan was

not repaid within 270 days. If that

occurred, banks were able to charge a

non-concessional interest rate above

15.0 percent. If the pre-shipment loan

was outstanding beyond 360 days,

banks then charged the cash credit rate

from the first day of advance of the loan

until the exports were realized.

Interest charged under this program

must be liquidated with export

proceeds. If the interest is paid with

sources other than foreign currency

export proceeds, the interest element of

the loan is not treated as export credit,

and is charged at rates applicable to

domestic credit. During the POR, if a

company’s exports did not materialize,

banks charged the cash credit rate plus

a penal interest rate of two (2.0) percent

from the first day of advance of the loan.

The Department found this program

to be an export subsidy, and thus

countervailable, in prior administrative

reviews of this order, because receipt of

pre-shipment export financing was

contingent upon export performance,

and the interest rates were preferential.

See, e.g., Final Results of Countervailing

Duty Administrative Review: Certain

Iron-Metal Castings From India, 56 FR

41658 (August 22, 1991); Final Results

of Countervailing Duty Administrative

Review: Certain Iron-Metal Castings

From India, 56 FR 52515 (October 21,

1991); and Final Results of

Countervailing Duty Administrative

Review: Certain Iron-Metal Castings

From India, 61 FR 64676 (December 6,

1996) (‘‘1987, 1988, and 1993 Indian

Castings Final Results’’). No new

information or evidence of changed

circumstances has been submitted in

this proceeding to warrant

reconsideration of this finding.

Therefore, in accordance with

§ 771(5A)(B) of the Act, we continue to

find that this program constitutes an

export subsidy.

To determine the benefit conferred

under this program, we compared the

interest rate charged under the preshipment financing program to a

benchmark interest rate. In conducting

this administrative review, we learned

that of the twelve respondents that

received pre-shipment financing on

which interest was paid during the POR,

four had received, and paid interest on,

commercial short-term working capital

loans, which were not provided under

a GOI program. These companies are:

Calcutta Ferrous Ltd. (‘‘Calcutta

Ferrous’’), Crescent Foundry Co. Pvt.

Ltd. (‘‘Crescent Foundry’’), Dinesh

Brothers (P) Ltd. (‘‘Dinesh’’), and

Nandikeshwari Iron Foundry Pvt. Ltd.

(‘‘Nandikeshwari’’). For these

companies, we used a company-specific

benchmark interest rate to measure the

benefit each company received under

the pre-shipment export financing

scheme.

For all other respondents, we used as

our benchmark the cash credit rate. In

the 1994 administrative review of this

order, the Department determined that,

in the absence of a company-specific

benchmark, the most ‘‘comparable’’

short-term benchmark to measure the

benefit under the pre-shipment export

financing scheme is the cash credit

interest rate. See, Final Results of

Countervailing Duty Administrative

Review: Certain Iron-Metal Castings

From India, 62 FR 32297 (June 13, 1997)

(‘‘1994 Indian Castings Final Results’’).

The cash credit interest rate is for

domestic working capital finance, and

thus comparable to pre-and postshipment export working capital

finance. During the POR, this rate was

18.44 percent, as reported by the GOI in

its April 9, 1998 questionnaire response.

We compared either the companyspecific benchmark rates or the cash

credit benchmark rate, as appropriate, to

the interest rates charged on preshipment rupee loans and found that for

loans granted under this program, the

interest rates charged were lower than

the benchmark rates. Therefore, in

accordance with section 771(5)(E)(ii) of

the Act, this program conferred

countervailable benefits during the POR

because the interest rates charged on

these loans were less than what a

company otherwise would have had to

pay on a comparable short-term

commercial loan.

To calculate the benefit from the preshipment loans, we compared the actual

interest paid on the loans with the

amount of interest that would have been

paid at the applicable benchmark

interest rate. Where the benchmark rates

exceeded the program rates, the

difference between those amounts is the

benefit.

If the pre-shipment financing loans

were provided solely to finance exports

of subject merchandise to the United

States, we divided the benefit derived

from those loans by exports of subject

merchandise to the United States. For

all other pre-shipment financing loans,

we divided the benefit by total exports

to all destinations. On this basis, we

preliminarily determine the net subsidy

from this program for the producers/

exporters of the subject merchandise to

be as follows:

Net subsidies—producer/exporter

Net subsidy

rate—

percent

Calcutta Ferrous Ltd ............. 0.20

Commex Corporation ............ 0.13

Crescent Foundry Co. Pvt.

Ltd ..................................... 0.08

Dinesh Brothers Pvt. Ltd ...... 3.05

Kajaria Iron Castings Pvt. Ltd 0.33

Nandikeshwari Iron Foundry

Pvt. Ltd .............................. 0.22

R.B. Agarwalla & Company .. 0.34

RSI Limited ........................... 0.37

Seramapore Industries Pvt.

Ltd ..................................... 0.53

Super Iron Foundry ............... 1.11

Uma Iron & Steel .................. 0.34
37536 Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices

Net subsidies—producer/exporter

Net subsidy

rate—

percent

Victory Castings Ltd .............. 0.30

B. Post-Shipment Export Financing

Post-shipment export financing

consists of loans in the form of trade bill

discounting or advances by commercial

banks. The credit covers the period from

the date of shipment of the goods, to the

date of realization of export proceeds

from the overseas customer. Postshipment finance, therefore, is a

working capital finance or sales finance

against receivables. The interest amount

owed is deducted from the total amount

of the bill at the time of discounting by

the bank. The exporter’s account is then

credited for the rupee equivalent of the

net amount.

In general, post-shipment loans are

granted for a period of up to 90 days.

The interest rate charged on these loans

was 13.0 percent during the POR. For

loans not repaid within the negotiated

number of days (90 days maximum),

banks assessed interest at 15.0 percent

for the number of days the loan was

overdue, up to six months from the date

of shipment. Between February 8, 1996

and October 20, 1996, the RBI ‘‘freed’’

the interest rate charged on loans not

repaid within 90 days, and allowed

banks to charge commercial interest

rates on such credit. On October 21,

1996, the RBI restored the 15.0 percent

interest rate for loans due beyond 90

days. For loans not repaid within 180

days, exporters would lose the

concessional interest rate on this

financing, and interest would be

charged at a commercial rate

determined by the banks.

In prior administrative reviews, the

Department found this program to be an

export subsidy because receipt of the

post-shipment financing was contingent

upon export performance, and the

interest rates were preferential. See, e.g.,

1987, 1988, and 1993 Indian Castings

Final Results. No new information or

evidence of changed circumstances has

been submitted in this proceeding to

warrant reconsideration of this finding.

Therefore, in accordance with section

771(5A)(B) of the Act, we continue to

find that this program constitutes an

export subsidy. During the POR,

thirteen of the sixteen respondent

companies made payments on postshipment loans for exports of subject

castings to the United States.

To determine the benefit conferred

under this program, we compared the

interest rate charged under the postshipment financing program to a

benchmark interest rate. For Calcutta

Ferrous, Crescent Foundry, Dinesh, and

Nandikeshwari, we used as our

benchmark, the company-specific

interest rates, discussed above, to

measure the benefit each company

received under the post-shipment

export financing scheme. Because the

loans under this program are

discounted, and the effective rate paid

by the exporters on these post-shipment

loans is a discounted rate, we derived

discounted benchmark rates from each

company’s respective benchmark

interest rate.

In regard to those respondents for

which we did not have a companyspecific benchmark rate, we used as our

benchmark, the cash credit rate

discussed above in the pre-shipment

financing section. From the cash credit

benchmark, we derived a discounted

rate of 15.57 percent for measuring the

benefits conferred by this program.

We compared either the discounted

company-specific benchmark rates or

the discounted cash credit benchmark

rate to the interest rates charged on postshipment loans and found that for loans

granted under this program, the interest

rates charged were lower than the

benchmarks. Therefore, in accordance

with section 771(5)(E)(ii) of the Act, this

program conferred countervailable

benefits during the POR where the

interest rates charged on the loans were

less than what a company otherwise

would have had to pay on a comparable

short-term commercial loan.

To calculate the benefit from these

loans, we followed the same short-term

loan methodology discussed above for

pre-shipment financing. We divided the

benefit by either total exports or exports

of the subject merchandise to the United

States, depending on whether the

company was able to segregate its postshipment financing by merchandise and

destination. For RSI Limited, however,

we used as our denominator, total

exports of subject castings and nonsubject castings to the United States. On

this basis, we preliminarily determine

the net subsidy from this program for

the producers/exporters of the subject

merchandise to be as follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Calcutta Ferrous Ltd ............. 0.78

Carnation Industries Ltd ....... 0.03

Commex Corporation ............ 0.35

Crescent Foundry Co. Pvt.

Ltd ..................................... 0.31

Dinesh Brothers Pvt. Ltd ...... 0.67

Kajaria Iron Castings Pvt. Ltd 0.42

Nandikeshwari Iron Foundry

Pvt. Ltd .............................. 0.27

R.B. Agarwalla & Company .. 0.35

RSI Limited ........................... 0.20

Net subsidies—producer/exporterNet subsidy

rate—percent

Seramapore Industries Pvt.

Ltd ..................................... 0.05

Super Iron Foundry ............... 0.12

Uma Iron & Steel .................. 0.53

Victory Castings Ltd .............. 0.40

C. Post-Shipment Export Credit in

Foreign Currency (‘‘PSCFC’’)

On January 1, 1992, the GOI

introduced a modified post-shipment

financing scheme, i.e., Post-Shipment

Export Credit in Foreign Currency. (The

GOI terminated the PSCFC scheme

effective February 8, 1996.) This

modified scheme enabled exporters to

discount foreign currency export bills at

foreign currency interest rates linked to

the London Interbank Offering Interest

Rate (‘‘LIBOR’’). Loans under this

financing scheme were not provided to

the exporter in the foreign currency, but

the post-shipment credit liability of the

exporter was denominated in the foreign

currency, which was then liquidated

with export proceeds in foreign

currency. During the POR, PSCFC loans

were granted for a period of up to 90

days with an interest rate fixed by the

RBI. The interest amount, calculated at

the applicable foreign currency interest

rate, was deducted from the total

amount of the bill at the time of

discounting by the bank. The exporter’s

account was then credited for the rupee

equivalent of the net foreign currency

amount. During the POR, the interest

rate charged on PSCFC loans ranged

from 7.5 percent to 9.5 percent for the

negotiated term of the loan (90 days

maximum). Interest on overdue loans

was charged at 9.5 percent until January

15, 1996. Thereafter, banks were free to

charge commercial interest rates on

PSCFC loans not repaid within 90 days.

If the overseas customer defaulted and

the export bill could not be liquidated

with export proceeds, the PSCFC loan

was converted into rupee credit at the

selling foreign exchange rate prevailing

on the day of liquidation. The exporter

was responsible for paying the rupee

equivalent of the bill at the exchange

rate prevailing on the day of liquidation

by the bank. The interest recovered on

the liquidated loan was charged at a

commercial rate determined by the

bank.

Under the PSCFC program, companies

had the option of converting their

export bills into rupees using either the

spot rate of exchange or the forward rate

of exchange. During the POR, all

respondent companies, which used the

PSCFC program, elected to convert their

export bills into rupees at the spot rate

of exchange. If the bank holding the
Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices 37537

export bill, converted at the spot rate,

realized an exchange rate gain due to

exchange rate movements up to the date

the bill came due, the bank was

required, by law, to transfer the gain to

the exporter. However, if the bank

suffered an exchange rate loss, the

exporter, by law, was obligated to cover

that loss. Thus, the bank, in effect, faced

an exchange rate that was fixed over the

‘‘life of the bill.’’ Under such

circumstances, where the rupee value of

the bill—from the bank’s standpoint—is,

in fact, fixed at the time of discount, the

rate of discount measured in either

dollars or rupees is the same. Therefore,

the PSCFC discount rate can be viewed

equivalently as either a dollardenominated rate or a rupeedenominated rate. If viewed as a dollardenominated rate, no exchange rate

adjustment to the rupee-denominated

benchmark is warranted, because the

banks face no exchange rate risk in

holding the bills. Thus, no matter how

the PSCFC discount rate is viewed, a

rupee-benchmark is appropriate for

benefit calculation purposes where the

exporter opts to convert the exports bills

using the spot rate of exchange.

In the 1993 Indian Castings Final

Results, the Department found this

program to be an export subsidy, and

thus countervailable, because receipt of

PSCFC loans was contingent upon

export performance, and the interest

rates were preferential. No new

information or evidence of changed

circumstances has been submitted in

this proceeding to warrant

reconsideration of this finding.

Therefore, in accordance with

§ 771(5A)(B) of the Act, we continue to

find that this program constitutes an

export subsidy. During the POR, five of

the sixteen respondent companies made

payments on PSCFC loans for shipments

of subject castings to the United States.

To determine the benefit conferred

under this program, we compared the

interest rate charged under the PSCFC to

a benchmark interest rate. For Calcutta

Ferrous, Dinesh, and Nandikeshwari,

we used as our benchmark, the

company-specific interest rates,

discussed above, to measure the benefit

each company received under the

PSCFC. Because the loans under this

program are discounted, and the

effective rate paid by the exporters on

the PSCFC loans is a discounted rate,

we derived discounted benchmark rates

from each company’s respective

company-specific benchmark interest

rate.

In regard to those respondents for

which we did not have a companyspecific benchmark rate, we used as our

benchmark, the cash credit rate

discussed above in the pre-shipment

financing section. From the cash credit

benchmark, we derived a discounted

rate of 15.57 percent for measuring the

benefits conferred by this program.

We compared either the companyspecific benchmark discounted rates or

the discounted cash credit benchmark

rate to the interest rates charged on the

PSCFC loans and found that the interest

rates charged were lower than the

benchmarks. Therefore, in accordance

with section 771(5)(E)(ii) of the Act, this

program conferred countervailable

benefits during the POR because the

interest rates charged on these loans

were less than what a company

otherwise would have had to pay on a

comparable short-term commercial loan.

To calculate the benefit from these

loans, we followed the same short-term

loan methodology discussed above for

pre-shipment financing. We divided the

benefit by either total exports or exports

of the subject merchandise to the United

States, depending on whether the

company was able to segregate its

PSCFC financing by merchandise and

destination. For RSI Limited, however,

we used as our denominator, total

exports of subject castings and nonsubject castings to the United States. On

this basis, we preliminarily determine

the net subsidy from this program to be

as follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Calcutta Ferrous Ltd ............. 0.06

Dinesh Brothers Pvt. Ltd ...... 0.15

Nandikeshwari Iron Foundry

Pvt. Ltd .............................. 0.08

R.B. Agarwalla & Company .. 0.11

RSI Limited ........................... 0.08

As noted above, the GOI terminated

the PSCFC scheme effective February 8,

1996. All PSCFC loans received by the

five above listed companies were repaid

in their entirety (principal and interest)

during the POR. We verified that no

residual benefits have been provided or

received, and there is no evidence that

a substitute program has been

established. Therefore, in determining

the cash deposit rates for these five

castings producers/exporters, we will

not include the subsidy conferred by

this program during the POR.

D. Income Tax Deductions Under

Section 80HHC

Under section 80HHC of the Income

Tax Act, the GOI allows exporters to

deduct profits derived from the export

of merchandise from taxable income. In

prior administrative reviews of this

order, the Department found this

program to be an export subsidy, and

thus countervailable, because receipt of

benefits was contingent upon export

performance. See, e.g., 1993 Indian

Castings Final Results. No new

information or evidence of changed

circumstances has been submitted in

this proceeding to warrant

reconsideration of this finding.

Therefore, in accordance with

section771(5A)(B) of the Act, we

continue to find that this program

constitutes an export subsidy, and that

the financial contribution in the form of

tax revenue not collected, constitutes

the benefit.

To calculate the benefit to each

company, we subtracted the total

amount of income tax the company

actually paid during the review period

from the amount of tax the company

otherwise would have paid during the

review period had it not claimed any

deductions under section 80HHC. We

then divided this difference by the value

of the company’s total exports. On this

basis, we preliminarily determine the

net subsidy from this program to be as

follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Calcutta Ferrous Ltd. ............ 2.91

Carnation Industries Ltd. ...... 2.92

Commex Corporation ............ 4.79

Crescent Foundry Co. Pvt.

Ltd. .................................... 4.53

Dinesh Brothers Pvt. Ltd. ..... 5.31

Kajaria Iron Castings Pvt.

Ltd. .................................... 0.00

Kejriwal Iron & Steel Works

Pvt. Ltd. ............................. 11.76

Nandikeshwari Iron Foundry

Pvt. Ltd. ............................. 3.71

Overseas Iron Foundry ......... 3.74

R.B. Agarwalla & Company .. 2.73

RSI Limited ........................... 2.73

Seramapore Industries Pvt.

Ltd. .................................... 4.16

Shree Rama Enterprise ........ 10.85

Super Iron Foundry ............... 1.93

Uma Iron & Steel .................. 0.40

Victory Castings Ltd. 2.91 .... 2.17

E. Import Mechanisms (Sale of Licenses)

The GOI allows companies to transfer

certain types of import licenses to other

companies in India. In prior

administrative reviews of this order, the

Department found the sale of these

licenses to be an export subsidy, and

thus countervailable, because

companies received these licenses based

on their status as exporters. See, e.g.,

1993 Indian Castings Final Results. No

new information or evidence of changed

circumstances has been submitted in

this proceeding to warrant

reconsideration of this finding.

Therefore, in accordance with section

771(5A)(B) of the Act, we continue to
37538 Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices

find that this program constitutes an

export subsidy, and the financial

contribution in the form of the revenue

received on the sale of licenses,

constitutes the benefit.

During the POR, five of the sixteen

respondent companies sold Special

Import Licenses. Because the sale of the

Special Import Licenses were not tied to

specific shipments, we calculated the

subsidies by dividing the total amount

of proceeds a company received from

the sale of these licenses by the total

value of its exports of all products to all

markets. We preliminarily determine

the net subsidy from the sale of the

Special Import Licenses for these five

companies to be as follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Carnation Industries Ltd. ...... 0.24

Kajaria Iron Castings Pvt.

Ltd. .................................... 0.68

Kejriwal Iron & Steel Works .. 1.00

RSI Limited ........................... 0.03

Seramapore Industries Pvt.

Ltd. .................................... 0.73

F. Exemption of Export Credit from

Interest Taxes

Indian commercial banks are required

to pay a tax on all interest accrued from

borrowers. The banks pass along this tax

to borrowers in its entirety. As of April

1, 1993, the GOI exempted from the

interest tax all interest accruing to a

commercial bank on export-related

loans. In the 1993 administrative

review, we determined that this tax

exemption is an export subsidy and thus

countervailable, because only interest

accruing on loans and advances made to

exporters in the form of export credit is

exempt from the interest tax. See, 1993

Indian Castings Final Results. No new

information or evidence of changed

circumstances has been submitted in

this proceeding to warrant

reconsideration of this finding.

Therefore, in accordance with

§ 771(5A)(B) of the Act, we continue to

find that this program constitutes an

export subsidy, and that the financial

contribution in the form of tax revenue

not collected, constitutes the benefit.

During the POR, thirteen of the

sixteen respondent companies made

interest payments on export-related

loans, through the pre- and postshipment financing schemes, and thus,

were exempt from the interest tax under

this program. To calculate the benefit to

each company, we first determined the

total amount of interest paid by each

producer/exporter of subject castings

during the POR by adding the interest

payments made on all pre- and postshipment export loans. Next, we

multiplied this amount by three (3.0)

percent, the tax rate that the interest

would have been subject to without the

exemption during the POR. We then

divided the benefit by the value of the

company’s total exports or exports of

subject merchandise to the United

States, depending on whether the export

financing was tied to total exports or

only exports of subject castings to the

United States. For RSI Limited,

however, to determine the benefit

conferred from the exemption of interest

on the company’s post-shipment

financing, we used as our denominator,

total exports of subject castings and

non-subject castings to the United

States. On this basis, we preliminarily

determine the net subsidy from this

program to be as follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Calcutta Ferrous Ltd. ............ 0.14

Carnation Industries Ltd. ...... 0.13

Commex Corporation ............ 0.06

Crescent Foundry Co. Pvt.

Ltd. .................................... 0.06

Dinesh Brothers Pvt. Ltd. ..... 0.39

Kajaria Iron Castings Pvt.

Ltd. .................................... 0.26

Nandikeshwari Iron Foundry

Pvt. Ltd. ............................. 0.13

R.B. Agarwalla & Company .. 0.11

RSI Limited ........................... 0.22

Seramapore Industries Pvt.

Ltd. .................................... 0.07

Super Iron Foundry ............... 0.16

Uma Iron & Steel .................. 0.11

Victory Castings Ltd.0.14 ...... 0.18

II. Programs Preliminarily Found To Be

Not Used

We examined the following programs

and preliminarily find that the

producers/exporters of the subject

merchandise did not apply for or

receive benefits under these programs

during the POR:

1. Market Development Assistance

(MDA)

2. Rediscounting of Export Bills Abroad

(EBR)

3. International Price Reimbursement

Scheme (IPRS)

4. Cash Compensatory Support Program

(CCS)

5. Programs Operated by the Small

Industries Development Bank of India

(SIDBI)

6. Export Promotion Replenishment

Scheme (EPRS) (IPRS Replacement)

7. Export Promotion Capital Goods

Scheme

8. Benefits for Export Oriented Units

and Export Processing Zones

9. Special Imprest Licenses

10. Special Benefits

11. Duty Drawback on Excise Taxes

12. Payment of Premium Against

Advance Licenses

13. Pre-Shipment Export Financing in

Foreign Currency (PCFC).

Preliminary Results of Review

In accordance with 19 C.F.R.

§ 351.221(b)(4)(i), we calculated an

individual subsidy rate for each

producer/exporter subject to this

administrative review. For the period

January 1, 1996 through December 31,

1996, we preliminarily determine the

net subsidy for the reviewed companies

to be as follows:

Net subsidies—producer/exporterNet subsidy

rate—percent

Calcutta Ferrous Ltd ............. 4.09

Carnation Industries Ltd ....... 3.32

Commex Corporation ............ 5.33

Crescent Foundry Co. Pvt.

Ltd ..................................... 4.98

Dinesh Brothers Pvt. Ltd ...... 9.57

Kajaria Iron Castings Pvt. Ltd 1.69

Kejriwal Iron & Steel Works

Pvt. Ltd .............................. 12.76

Nandikeshwari Iron Foundry

Pvt. Ltd .............................. 4.41

Overseas Iron Foundry ......... 3.74

R.B. Agarwalla & Company

Pvt. Ltd .............................. 3.64

RSI Limited ........................... 3.63

Seramapore Industries Pvt.

Ltd ..................................... 5.54

Shree Rama Enterprise ........ 10.85

Super Iron Foundry ............... 3.32

Uma Iron & Steel .................. 1.38

Victory Castings Ltd .............. 3.05

If the final results of this review

remain the same as these preliminary

results, the Department intends to

instruct the U.S. Customs Service

(‘‘Customs’’) to assess countervailing

duties as indicated above.

The Department also intends to

instruct Customs to collect cash

deposits of estimated countervailing

duties as indicated below, of the f.o.b.

invoice price on all shipments of the

subject merchandise from reviewed

companies, entered, or withdrawn from

warehouse, for consumption on or after

the date of publication of the final

results of this review. Because the PostShipment Export Credit in Foreign

Currency program was terminated

effective February 8, 1996, we are not

including the subsidy conferred by this

program during the review period, in

determining the cash deposits to be

collected by Customs. We preliminarily

determine the cash deposit rates for the

reviewed companies to be as follows:

Net Subsidies—Producer/ExporterNet subsidy

rate—percent

Calcutta Ferrous Ltd ............. 4.03
Federal Register / Vol. 63, No. 133 / Monday, July 13, 1998 / Notices 37539

Net Subsidies—Producer/ExporterNet subsidy

rate—percent

Carnation Industries Ltd ....... 3.32

Commex Corporation ............ 5.33

Crescent Foundry Co. Pvt.

Ltd ..................................... 4.98

Dinesh Brothers Pvt. Ltd ...... 9.42

Kajaria Iron Castings Pvt. Ltd 1.69

Kejriwal Iron & Steel Works

Pvt. Ltd .............................. 12.76

Nandikeshwari Iron Foundry

Pvt. Ltd .............................. 4.33

Overseas Iron Foundry ......... 3.74

R.B. Agarwalla & Company

Pvt. Ltd .............................. 3.53

RSI Limited ........................... 3.55

Seramapore Industries Pvt.

Ltd ..................................... 5.54

Shree Rama Enterprise ........ 10.85

Super Iron Foundry ............... 3.32

Uma Iron & Steel .................. 1.38

Victory Castings Ltd .............. 3.05

Because the URAA replaced the

general rule in favor of a country-wide

rate with a general rule in favor of

individual rates for investigated and

reviewed companies, the procedures for

establishing countervailing duty rates,

including those for non-reviewed

companies, are now essentially the same

as those in antidumping cases, except as

provided for in section 777A(e)(2)(B) of

the Act. The requested review will

normally cover only those companies

specifically named. See 19 C.F.R.

351.213(b). Pursuant to 19 C.F.R.

351.212(c), for all companies for which

a review was not requested, duties must

be assessed at the cash deposit rate, and

cash deposits must continue to be

collected, at the rate previously ordered.

As such, the countervailing duty cash

deposit rate applicable to a company

can no longer change, except pursuant

to a request for a review of that

company. See, Federal-Mogul

Corporation and the Torrington

Company v. United States, 822 F.Supp.

782 (CIT 1993) and Floral Trade Council

v. United States, 822 F.Supp. 766 (CIT

1993) (interpreting 19 C.F.R. 353.22(e)

(now 19 C.F.R. 351.212(c)), the

antidumping regulation on automatic

assessment, which is identical to 19

C.F.R. 355.22(g)). Therefore, the cash

deposit rates for all companies except

those covered by this review will be

unchanged by the results of this review.

We will instruct Customs to continue

to collect cash deposits for nonreviewed companies at the most recent

company-specific or country-wide rate

applicable to the company. Accordingly,

the cash deposit rates that will be

applied to non-reviewed companies

covered by this order will be the rate for

that company established in the most

recently completed administrative

proceeding conducted under the URAA.

See, 1994 Indian Castings Final Results.

If such a review has not been

conducted, the rate established in the

most recently completed administrative

proceeding pursuant to the statutory

provisions that were in effect prior to

the URAA amendments is applicable.

See, 1993 Indian Castings Final Results.

These rates shall apply to all nonreviewed companies until a review of a

company assigned these rates is

requested. In addition, for the period

January 1, 1996 through December 31,

1996, the assessment rates applicable to

all non-reviewed companies covered by

this order are the cash deposit rates in

effect at the time of entry.

Public Comment

Pursuant to 19 C.F.R. 351.224(b), the

Department will disclose to the parties

of this proceeding within five days after

the date of publication of this notice, the

calculations performed in this review.

Interested parties may request a hearing

not later than 30 days after the date of

publication of this notice. Interested

parties may submit written arguments in

case briefs on these preliminary results

within 30 days of the date of

publication. Rebuttal briefs, limited to

arguments raised in case briefs, may be

submitted five days after the time limit

for filing the case brief. Parties who

submit argument in this proceeding are

requested to submit with the argument

(1) a statement of the issue and (2) a

brief summary of the argument. Any

hearing, if requested, will be held two

days after the scheduled date for

submission of rebuttal briefs. Copies of

case briefs and rebuttal briefs must be

served on interested parties in

accordance with 19 C.F.R. 351.303(f).

Representatives of parties to the

proceeding may request disclosure of

proprietary information under

administrative protective order no later

than 10 days after the representative’s

client or employer becomes a party to

the proceeding, but in no event later

than the date the case briefs, under 19

C.F.R. 351.309(c)(ii), are due. The

Department will publish the final

results of this administrative review,

including the results of its analysis of

issues raised in any case or rebuttal brief

or at a hearing.

This administrative review and notice

are issued and published in accordance

with section 751(a)(1) of the Act (19

U.S.C. 1675(a)(1)), 19 C.F.R. 351.213.

Dated: July 6, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 98–18598 Filed 7–10–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–427–815, C–475–825, and C–580–835]

Notice of Initiation of Countervailing

Duty Investigations: Stainless Steel

Sheet and Strip in Coils From France,

Italy, and the Republic of Korea

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce

EFFECTIVE DATE: July 13, 1998.

FOR FURTHER INFORMATION CONTACT:

Marian Wells (France), at (202) 482–

6309; Vince Kane (Italy), at (202) 482–

2815; and Robert Copyak (Korea), at

(202) 482–2209, Import Administration,

U.S. Department of Commerce, Room

1870, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230.

Initiation of Investigations

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department’s regulations are references

to the provisions codified at 19 CFR Part

351, 62 FR 27296, May 19, 1997.

The Petition

On June 10, 1998, the Department of

Commerce (the Department) received

petitions filed in proper form by or on

behalf of Allegheny Ludlum

Corporation, Armco Inc., J&L Specialty

Steel, Inc., Washington Steel Division of

Bethlehem Steel Corporation, United

Steel Workers of America, AFL-CIO/

CLC, Butler Armco Independent Union,

and Zanesville Armco Independent

Organization, Inc. (the petitioners). J&L

Specialty Steel, Inc. is not a petitioner

for the countervailing duty investigation

involving France. Supplements to the

petitions were filed on June 19, 22, 24,

and 26, 1998.

In accordance with section 702(b)(1)

of the Act, petitioners allege that

manufacturers, producers, or exporters

of the subject merchandise in France,

Italy, and Korea receive countervailable

subsidies within the meaning of section

701 of the Act.

The petitioners state that they have

standing to file the petition because they

are interested parties, as defined under

sections 771(9)(c) and (d) of the Act.

Scope of the Investigations

For purposes of these investigations,

the products covered are certain